Re: More Bad News For Big Banks

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Stephen Gandel over at the Curious Capitalist has some more context and analysis on the SEC action against Goldman.

Of political import:

The first question was who was damaged here. The answer is all of us. First of all, the investors who bought the securities lost about $50 billion on them. Those investors were mostly pension funds. Second, Goldman insured these purposefully useless mortgage bonds with AIG. So all of us, taxpayers that is, had to pay up for those losses when AIG had to be bailed out. So this suit is really just a case of the government trying to get its money back from Goldman. That’s something we should see more of.

This has the potential to be a major political football in the financial reform debate, and may well be a sign of more confrontation to come between Wall Street and Washington.

Also: John Curran on “How Much Might Goldman Sachs Have To Pay?”